SAIL aims to start next phase of expansion in 2023-24

By: |
August 10, 2021 12:15 AM

The public sector unit is currently on the verge of completing a Rs 70,000-crore modernisation and expansion programme. After that, its capacity will go up to 21.4 MTPA.

The work on the expansion is likely to start in 2023-24.The work on the expansion is likely to start in 2023-24.

Steel Authority of India (SAIL) will finalise the next phase of its modernisation and capacity expansion plan — to more than double its installed crude steel production capacity to 50 million tonne per annum (MTPA) — in the next 15-18 months, its top management said in an investor call.

The work on the expansion is likely to start in 2023-24.

The public sector unit is currently on the verge of completing a Rs 70,000-crore modernisation and expansion programme. After that, its capacity will go up to 21.4 MTPA.

In the next round of modernisation and expansion, likely to start from FY24, SAIL will look at expanding capacity by 12-14 MTPA in the first phase at its units in Bokaro, Burnpur (IISCO) and Rourkela, the management said.

SAIL has already completed land surveys in Rourkela and Bokaro, and has land parcels available to support a brownfield expansion.

“Taking cues from previous expansion, the management informed that it would not embark on all expansion projects at one go, but would pursue it in a manner that there is a sufficient time gap between two large payments,” brokerage firm Motilal Oswal said in a report.

SAIL aims to repay as much debt as possible before embarking on its expansion plans and finance the new phase of expansion at a 1:1 debt-to-equity ratio, it said.

Sources said in the first phase, the company intends to enhance strength at its Durgapur Steel Plant to 7.5 MTPA from 2.5 MTPA. That of the Rourkela Steel Plant has been proposed to be raised to 8.8 MTPA from 3.7 MTPA. Bokaro Steel Plant’s capacity will be raised to 9.5 MTPA and IISCO’s to 3 MTPA in the first phase and subsequently to 7.3 MTPA in the next phase.

Though there hasn’t been any plan to raise capacity at Bhilai Steel Plant in the first phase, its capacity will be raised to 12 MTPA in the second phase from the current 7 MTPA, and subsequently to 14 MTPA by 2030.

SAIL’s expansion plan is in line with the National Steel Policy that aims to create an installed capacity of 300 MTPA by 2030-31.

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